Florida/Georgia Personal Injury & Workers Compensation

...Intended to restrain increases in Medicare payments for inpatient hospital services, TEFRA expanded the § 223 cost limits to include ancillary and special care unit operating costs and also established separate "rate-of-increase ceilings" for participating hospitals. See generally 42 C.F.R. § 413.40. (Dkt. 1, Paragraph 12). 8. The TEFRA rate-of-increase ceilings are based on a hospital's allowable inpatient operating costs per case incurred in its "base period." 42 C.F.R. § 413.40(b)(1)....

...Conversely, if the hospital's operating costs were less than the target amount, the hospital received a bonus, calculated as 50% of the difference between the hospital's costs and its target amount, subject to a maximum of 5% of the target amount. Id. at § 1395ww(b)(1)(A). See generally 42 C.F.R. § 413.40....

...ry "where events beyond the hospital's control or extraordinary circumstances, including changes in the case mix of such hospital, create a distortion in the *1339 increase in costs for a cost reporting period." 42 U.S.C. § 1395(b)(4)(A); 42 C.F.R. § 413.40(g)....

...On September 11, 1992, the Intermediary wrote to the Hospitals, enclosing a letter from HCFA, dated July 24, 1992, stating that the Hospitals' request for TEFRA adjustments should be denied for two reasons. First, HCFA claimed that the providers had not filed timely appeals. Second, HCFA relied on 42 C.F.R. § 413.40(g)(1), which provides that a TEFRA adjustment may only be granted if a hospital's operating cost exceeds the TEFRA target limit....

...Impermissible Retroactive Application of 1988 Regulation In 1988, the Secretary amended her regulations to include the following: "HCFA may grant an adjustment requested by the hospital only if a hospital's operating costs exceed the rate of increase ceilings imposed under this section." 42 C.F.R. § 413.40(g)(1)....

...rol or extraordinary circumstances create a distortion in the increase in costs for a cost reporting period (including any distortion in the costs for the base period against which such increase is measured)." 42 U.S.C. § 1395ww(b)(4)(A); 42 C.F.R. § 413.40(g)(2)....

...o which the pension must be assigned. Section 413 of CAS deals with adjusting the pension cost and provides that same should be determined by measuring actuarial gains and losses and assigning such gains and losses to a specific cost account period. Section 413.40 of CAS provides that a contractor is required to calculate actual gains and losses on an annual basis and the adjustment will then be taken into account in future cost accounting periods in determining the cost for the segment....

...In 1982 Congress enacted the Tax Equity and Fiscal Responsibility Act ("TEFRA"), portions of which were intended to provide incentives for Medicare providers to operate more efficiently and economically. TEFRA provisions establish limits on reasonable cost reimbursements to care providers of Medicare patients. 42 C.F.R. § 413.40 Under TEFRA, a target amount is set for each provider based on its allowable inpatient costs for a base-period. 42 C.F.R. § 413.40(c)(4). The current year target amount is then determined by applying a rate-of-increase or update factor to the target amount of the base period. 42 C.F.R. § 413.40(c)(4)(iii). If a provider's operating costs exceed the target amount, the provider is subject to a reduction in its reimbursement, and if the operating costs are less than the target amount, the provider receives a bonus. 42 C.F.R. § 413.40(d)....

...o include explicitly FICA taxes (if the hospital did not incur costs for FICA taxes in its base period), and services billed under Part B of Medicare during the base period, but paid under Part A during the subject cost reporting period. 42 C.F.R. §§ 413.40(g)-(h)....

...id not request a TEFRA adjustment on the same basis in a previous year. The TEFRA requires a comparison of a provider's cost report for the "current" reporting period with its base year target amount, adjusted by the update percentage. See 42 C.F.R. § 413.40(c)(4)....

...§ 1395ww(b)(4)(A)(i) ("The Secretary shall provide for an exception and adjustment ... where events ... create a distortion in the increase in costs for a cost reporting period"). The word "significant" was added as a qualifier by the Secretary in promulgating the regulations governing Medicare reimbursements. See 42 C.F.R. § 413.40(h)(1) ("HCFA may make an adjustment to take into account factors that would result in a significant distortion in the operating costs")....

...(A.R.6) In support of this position, the Secretary cites to regulations governing Medicaid cost reimbursements requiring that the increase in operating costs be "attributable to the circumstances specified, separately identified by the hospital, and verified by the intermediary." 42 C.F.R. § 413.40(g)(1)....